Listed on the NYSE Arca, the fund seeks to track the performance of the IQ Hedge Multi-Strategy Index, a proprietary index that attempts to replicate the risk-adjusted return characteristics of hedge funds using various hedge fund investment styles.

At launch in March 2009, the fund introduced an entirely new class of liquid alternative ETF, offering investors access to a hedge fund-like strategy with all the advantages of an ETF – low costs, high liquidity and full transparency.

Commenting on the milestone, Adam Patti, IndexIQ’s chief executive officer, said: “We are seeing tremendous interest in QAI from the financial advisor community, who increasingly are using the fund as their core hedge fund portfolio holding, while QAI also is being added to ETF model portfolios throughout the industry.”

He added: “In many cases, QAI is used to provide the liquid alternatives allocation in these models, while in other cases, it is viewed as a bond substitute. Using QAI as a fixed income alternative has resonated strongly with investors since QAI is designed to seek strong performance in rising rate environments with a similar volatility profile to the aggregate bond market, while providing a competitive yield.”

The liquid alternative category has grown substantially in recent years with firms such as SEI and McKinsey & Company predicting that billions of dollars in new assets will flow into these funds over the next decade.

Patti believes IndexIQ is well positioned to take advantage of this trend.

“There is no question that investors have been confronted with a series of extraordinary challenges over the last few years, ranging from the financial crisis to quantitative easing and the potential impact of Fed tapering. We believe our funds help solve a real problem faced by many investors who want exposure to the markets but are concerned about volatility and downside risk.”